Government interferes with midweek holidays as well as sick leave benefits and Sunday and overtime compensations

The Government intends to lower employer costs by cutting sick leave benefits, Sunday and overtime pay - although it cannot intervene with the collective agreements at this point of time. Certain midweek holidays would also be abolished. The reason for these measures is the Government’s wish to find an alternative “productivity leap” instead of the social contract negotiations that fell through.

Juha Sipilä’s (Centre Party) Government intends to impose several hard measures on employees to cut the costs paid by the employers. The Government proposes that Epiphany and Ascension Day become either normal working days or payless holidays. The first sick leave day would be without pay, and the pay for the second to the ninth sick leave day would go down by 20%. In addition, overtime compensation would be halved, Prime Minister Sipilä told in the press conference on Tuesday.

Sunday work compensation would drop from 100 to 75 percent but as these compensations are based on collective agreements in many sectors, the legislative amendment has no immediate effect on them, at least for now. The same applies to the sick leave pay and overtime compensations in many sectors; these benefits are included, for example, in the collective agreement of the commercial sector. According to Prime Minister Sipilä, the changes would become operative when the collective agreements expire; normally, the Government would not avail of means to change the collective agreements and override the negotiations between the unions and employer organisations.

In the press conference, Prime Minister Sipilä referred to “compelling laws” that would prevent the labour parties from agreeing on these issues in their collective agreements.

Besides the stick, the Government also offers some carrots. The social security payments payable by employers are going to be decreased to promote employment, and the so-called employment security schemes applicable to those made redundant will be improved.

– Employees made redundant will have the right to have coaching promoting their employability, Mr. Sipilä added.

The Government also proposes that in companies with more than 20 employees the occupational healthcare could continue for six months after the dismissals. These measures make it more expensive for the employers to terminate employments.

Expenses incurred for family leaves would give the employers right to a 2,500 euro one-off compensation, a measure aiming at promoting the employability of young women.

The Government finds that Finland’s competitiveness compared to its rival countries should be significantly improved, Mr. Sipilä continued. This was also the purpose of the earlier negotiations on the so-called social contract which failed because the harsh measures proposed would almost entirely be targeted at employees.

The aim of the Government is to create new jobs and increase the employment rate. The Government will later issue a statement to Parliament on the proposals, and Parliament is still going to discuss the proposals and possible legislative amendments. The Government will also have further discussions with the employer organisations and unions on Wednesday. It is expected that the proposals will not be welcomed by the unions.

– The Government looks forward to an understanding approach, Mr. Sipilä added.